Environmental and social responsibility: a normative financial reporting concept

The inclusion of environmental and social values in a firm’s policy and key performance indicators can enhance its reputation and create wealth for both the firm and its investors. Social values and associated activities are initially integrated with financial resources through the strategic plan, which requires firms to merge the longer term environmental and social values with short term economic objectives and performance measures. Strategies will differ between individual corporations. This paper provides a normative reporting concept which connects the financial implications associated with longer term planning for environmental and social values, with short term accounting reports. Reporting variants adapted from total cost assessment, life cycle costing, variable costing are integrated to offer opportunities to present both past and predicted information based on a product segment view.